District 5 Diary

Sunday, January 15, 2012

The lesson from Spain: Don't build high-speed rail

Two stories on the front page of the Chronicle this morning: one about how Spain built a high-speed rail system, and another with the head "Brown pushes $1 billion in cuts." The sub-head on the high-speed rail story: "What California can learn from Spain's system." The main lesson: Spain can't afford the system it has built, and California can't afford its high-speed rail project.

In spite of the Chronicle's deceptive head---"Revenues fall short despite popularity"---the Fresno Bee story tells us that "Service between some smaller cities has been cut because too few people ride the trains, leaving some wondering whether it is anything more than a luxury commuter service." How popular can the system be if "too few people" ride it?

Spain has spent $60 billion to build a system that still requires government subsidies:

But despite assurances from the Spanish government that the long-distance AVE trains operate without a public subsidy, academics and analysts don't believe that even the busiest high-speed route---between Madrid and Barcelona---musters enough riders to cover operating costs, much less the billions of euros invested to build the infrastructure over the past 20 years.

This is why governors in Florida, Wisconsin, and Ohio rejected federal high-speed rail money: They understood that state taxpayers, not the federal government, would have been responsible for both cost-overruns in building the system and for operating the system after it was built:

In recent years, the European Union funneled about $17 billion in grants and billions more in low-interest loans to Spain to improve its high-speed rail. But [Andreu]Ulied said that will end in a couple of years, leaving Spain to bear the entire cost of its ambitious expansion plans. Ulied and GermÀ Bel, a professor of political economics at the University of Barcelona, agree that none of the Spanish high-speed rail routes has enough riders to make the system financially sustainable. "There is no question whether (Spain's system) can cover its costs. It cannot," Bel said. "It actually has not recovered one single euro from the infrastructure investment. The government claims they are recovering the operating costs, but the numbers are not clear."

This is exactly what critics of California's high-speed rail project have been saying for years: It's not only that California can't afford to build this luxury rail system, but it also can't afford to subsidize its operation if/when it's built.

In fact the authorizing legislation for 2008's Proposition 1A prohibits any taxpayer subsidy to operate the system.

The only question now is, When will Governor Brown face the facts and pull the plug on this dumb, wasteful project?